Wednesday, July 30, 2008

today

Despite a substantial rebound in oil and gas, the market shrugged it off and managed a very strong late surge. I suspect that the strength in oil brought in a few premature shorts who served as fuel for a bit of a squeeze.

Financials managed to tack onto yesterday's gains after looking weak for a while, but the primary story was in energy- and commodity-related stocks. These groups were favorites earlier in the year but have broken down badly in recent weeks. Today they finally found some buyers, and the squeeze was on. They even managed to close near their highs, and that bodes well for some follow-through.

Follow-through has been the difficult thing for this market lately. One of the reasons we don't have any good leadership is that strong stocks are quickly sold by market players who lack the confidence to hold anything. Many gravitate toward the oversold bounce plays such as financials last week and in energy today, but trying to gauge how far these moves will carry is an extremely difficult task.

We have some good earnings after the close from First Solar (FSLR - commentary - Cramer's Take) and Visa (V - commentary - Cramer's Take) that may help keep the sentiment positive, but oil and financials continue to control this market.